the woman says when she figured out what was going on she started looking and her home and fund 20 sets of keys and her house and her garden. she returned the keys and says her neighbors have a sense of humor. at least to her face. but think what they were really considering doing do that cat. just saying...it smells in my hall like the neighbors everyone cooking the canned cat food. >>neil: you were look like at the united states capitol where we still have no deal, everyone. we reporting live from the russell building. we are waiting. we are watching. we are hoping to see a deal. that does not seem to be imminent. with all the work i have to do a fox and the super hero role where i try to get the guys to

together get a deal done, it does not look likely. senator john mccain will join me and he finds this illustration to be way off for body types but that is just his opinion. and now why they are more worried today. normally when neither side blasts the other that is a sign of progress but both were taking to the microphone today to express frustration with the process that suddenly seems to have gone awry. take a listen. >> the american people have to be scrapping their heads and wondering when is the president going to get serious? >> the republicans refuse to touch one hair on the head of the wealthiest people in our country. >>neil: so they are become to their talking points. you heard a lot about trying to put together something by the end of the year but the fact is they would have to do it in the next couple of days given the parliamentary procedures of this place and going to conference and writing a bill all way over

my head but not over this next fellow's head, a former republican presidential candidate, from the state of arizona, john mccain. good to see you. >>guest: glad to see you brought your son, who looks marvelously like his mother. i did see that you were not judged as the most sexy man a live at kim jong-un does. >>neil: this is a tough energy and now have you shortened it. in your get do you think a deal will be made? >>guest: i do. i'm not too worried about the parliamentary procedure because you can all override that but it does lend urge answer to it. i find it hard to believe we are going to push everything over this cliff just -- i think the markets will react. you know we more about that, than i do.

without that we are staying at things and seeing businesses and early sell of stocks to get money and dividends and taking the money and run now. what i would like to see, and why mean to be too partisan when i say this but i am clearly partisan, why not do what ronald reagan did? why not do what public pick -- bill clinton did, call the men and women over to the oval office. i would like to see, look, we are going to sit here until midnight and we will lay things out and we will be able to come out and stand before the american people and say we have reached an agreement. the approval ratings would go from now at 10 percent or 11 percent, below journalists of all things, of all things, and

--. >>neil: that makes me wonder, they are back to quibbleing. >>guest: why would the president spent yesterday in michigan railing against something that the michigan legislature is going to do when we are facing a few days before going over the cliff? i don't get it. unless the president things he will gain in the short temperature -- term politically by going over the cliff but long term historians put the blame on the president of the up. it may look like a gain short term, but in the long run, is that really helpful to the president's reputation in 20 or 30 years they could not get a deal and push the country into another recession or a short-term recession? >> harry reid, the majority leader, would say very unlikely we would have a deal by christmas, ostensibly we are

running out of days on the calendar. if that is the case and he quibbles that the republicans have not come up with specifics, are you against running to the clinton rates or are you okay where that if it avoids the hoops of looking for like revenue? >>guest: i am in favor of anything that gets an agreement. it seems to me, why are we focusing on that narrow part of this entire scenario? why aren't we will giving equal weight in the media and our debates on entitlements. we know what the elephant in the room is. they are not the ones at the table, right now, right now it is the president, speaker boehner, and perhaps mcconnell and perhaps pelosi but right now

--. >>neil: the best-case-scenario we hear, senator, is republicans agree to hike the taxes depending on the details with a promise they will address spending next year. republicans argue they have been that way before. >>guest: i have bench front property in arizona if you would accept that deal. >>neil: you would not? >>guest: no, i would not. >>neil: you want to see the cuts now? >>guest: in 1986 ronald reagan sat down with the democrats. they had a deal. that was cut spending for $3 for every dollar they raise in taxes. guess what? they raised the taxes and never cut the spending. there is reason for us to be cautious about that. there has to be a way through this. maybe it will take the market starting to send a signal and people taking actions in anticipation of this raising of the taxes.

do you know an economist that doesn't believe we will not go into a recession. >>neil: the markets do not lately seem to be too worried. do you think no deal is better than a bad deal? >>guest: the only thing we can do is to make a deal. i think the american people deserve it. if we don't get it, i really worry about the country. i do worry. i am in discussions with people about this nuclear option. i am in discussions with people about the immigration reform issue. we could have discussions about this. i don't think the democrats want this to go over the cliff. not the majority of them. i pray not. >>neil: one seems to be tempting the other. >>guest: it is a game of

chicken. i don't believe it will happen. i don't think anyone wants it to happen. and sequestration is looming as of january 1. in the words of chairman mao it is darkest before it and death -- before it is totally black. >>neil: protests in michigan set to become the 24th right-to-work street and alan simpson, one thing trying to sell austerity, he will dance for it. would do you that for your country? ns ? shouldn't something that's truly advanced,

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>>neil: coming from our nation's capitol where they are

not making much progress which is alarming to senator john mccain. tom is -- time is wasting to put together something by this week to get through the hoops that have to be gone through to get a deal. senator simpson is worried about this process and would do anything to get a deal done. he even did this. the idea was according to the co-chair of the debt commission, look, we cannot keep kicking the can down the road. if this is what it takes to get people to wake up and young people to see what is going on, so be it. he is happy to embarrass himself as i am as a super hero, alan simpson. senator, good to have you.

always a pleasure. i did that little thing when they handed me that thing that said twitter and instagram and i didn't know what they were talking about. >>neil: it humanized it and showed the urgency for young people and what is at stake. my hats off to you. whatever the effect on young people, it has not moved the needle in washington, are you worried they do not strike a deal of any sort? >>guest: i remain more concerned than my buddy, erskine. when you have this undertow that if the democrats get an advantage if we go off the cliff or the republicans gain the advantage, that is wrong because

you say you value the party over the country. it is time to step to the plate for your country, your country need as tough vote. >>neil: some say you do thought need tax hikes versus spending cuts and a bad deal is worse than no deal. what do you say? >>guest: well, i agree with john, it is hard to believe that. but one thing i will bet you a lot of bucks if they go over the cliff or half a cliff which is hard to do, the markets will respond anyway and the guy that is hurt is the little guy the when inflation kicks in, and enters go up, guess who is hurt? the money guys always take care of themselves. the little guy. the middle class. everyone babbling about that person all day and all night.

those are the guys that will be hammered if you just go into the status quo or do small ball. that is a tragedy. >>neil: do you feel whatever deal is put together, senator, just curbing the growth if a lot of programs, nothing, not one will be formally cut, in other words, less money next year or nine or 10 years than this year. if we cannot curb the growth of anything in government how do we rain in government? >>guest: the word cut means if you got $10 president last year and you applied $15 and you get $12 million, you are "cut." this is baseline budgeting. go to zero base budgeting like most people do and you see where the "cuts" are. we are not cutting social security.

we are not cutting medicare the we said get if there and stop the automatic pilot process. this stuff is on automatic pilot. of $1.1 trillion that came in, in revenue, in 2011, that is everything, it only went to medicare and medicaid and social security. we borrowed to do two wars, infrastructure, homeland security, defense, everything, culture, big bird, the whole works, we borrowed $3.6 billion a day? we don't we were know what $1 trillion is. you say the big bang theory of the universe, the planets and the sun, spinning off, that happened 13 billion years ago and that isn't close to a trillion and we owe $16 trillion those babies. have a drink. wake up! >>neil: good words, senator, thank you. >>guest: take care my friend.

>>neil: senator simpson, he knows the match and so does kentucky senator rand paul who argues that, look, you can race to get a deal done but if it is a bad deal, maybe to that point, senator, a deal weighted on tax hikes, you would not be to that and it would cause more harm than good. >>guest: i have to say my kids saw you as have hero and they thought maybe your mom method you were special. >>neil: pile on, pile on the italian anchor. that is a genuine reflection of who i am. >>guest: i am sure your mom thinks you are special. >>neil: you think what isn't special the way they are going about the process and in the end you would not vote? >>guest: it is not as simple as are you for or against your country? i am obviously for the country the i want the country to succeed. i want economic growth. i want more jobs. we will get the opposite. if i thought raising taxes would be good for the economy, i would say do it, but it will be the

opposite, you raise tax rates, you may guess less revenue and less economic growth. this is historical example after historical example of lowering tax rates and more revenue, and the rich pay more of the income. does that mean anything with revenues, closing deductions or loopholes or the rates, you would be against? >>guest: i want to stimulate the economy. the only way i know how to do that is leave more money in the economy. i cannot understand any different than if i am if louisville, kentucky, i want more money to stay in louisville. i have seen how they spend the money here they are not responsible with your money. they have not earned my trust. i don't think they deserve to have anymore of my money. if we spend $3 million to study what monkeys do when they are on methamphetamine, that means we have not started cutting.

>>neil: how do you think this goes? i barely understand the procedures and votes and how you get bills to the floor, et cetera, but the feeling seems to be whatever you or for or against, by friday you have to ne if a vote.g or you will not >>guest: if they surprise me and call me up tonight and say, what should we do in we should, tomorrow, in the house of representatives, vote for what we believe in: keeping the bush tax rates as they are for everyone. permanently. and cutting responding. significant cuts in spending and refm entitlements. i have a bill that saves social security and sanes medicare by reforming they will. pass those bills and then when the democrats won't accept it, vote "present "and let them raise the taxes in the house of representatives. it comes to the senate, the republican senators vote for and it is like obamacare, a democrat juggernaut, they get what they want but it will be bad for their economy and their

fingerprints will be on it and ours won't. >>neil: but some say it will be republicans' fingerprints. >>guest: it depends what happens. if they vote for raising taxes half as much as obama wants it ruins what we stand for because we stand if limited government and less taxation. to we go halfway or we split the difference, then, both parties have their hands on it and we go in recession it will be confusing. but i want to be the party of lower taxes and limited government and if we go halfway or become president obama lite or democrat lite, that is not why i ran for office. >>neil: we appreciate you stopping by. senator rand paul. maybe presidential candidate, we don't know. that is another interview. we have a lot more coming up including marco rubio weighing

in on the debate. and chris van hollen and in the face of the michigan protests. the president has said this is about the middle class and traveled to michigan to illustrate 9 point. does he have a point? ♪

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>>neil: the whole machine thing is not just what is going on in michigan but another state that could become the 24th right-to-work state. the governor is momentsing a potentially from signing that after it passed the

republican-controlled house of representatives and earlier passed the republican-controlled senate. many in the union movement say he will become another scott walker referring to the wisconsin governor who had very heated relations with unions and that led to a recallest that famed but it soured relations to this day. the fallout which all of this in lansing. >>guest: it is nothing like it was with governor walker because this was not on his agenda. this is the scene outside his office, the romney office building, the george romney office building which, perhaps, you can see named after someone who you know better, his son, where the governor's office is and where the last of the protesters are holed up. perhaps you can see state patrol officers. from early today it looked crazy at times with some union member

whose sport the law, the sign was torn down by other union members who are opposed. most of folks now are calmed down and nothing at all like wisconsin where the protests went on for days. where it stands now both of these bills have passed. there is one public sector bill and one private sector bill, right-to-work bill, and they both passed. one has to be reconsidered, a parliamentary procedure and it goes to the governor. we talked to the governor's office and they say they have not decided whether he can sign it today or not. but if not today, certainly tomorrow. michigan will become the 24th right-to-work state in the united states. >>neil: as you know, i was telling you the president was in michigan yesterday equating what was going on with protecting the american worker and american

manufacturing and using that as an opportunity to say if this environment, that is not to make things rougher for workers by hiking taxes on the well-to-do. i am over simplifying this, chris van hollen is joining me from the house of representatives, a prominent democrat. >>guest: what we are talking about here in washington, is trying to extend middle class tax cuts, to ask high income individuals to pay a little bit more to reduce our deficit because if they don't pay anymore, it means that seniors on medicare are going do have to pay a lot more and they will have lets to invest in our infrastructure and roads. it is a fight for the middle class. unions form to bargain for better wages and working conditions for workers that is why they are there. this law they are about to pass in michigan, undermines their ability to do that. >>neil: how if it gives workers a chance to say you want to be in a union or not?

>>guest: it creates a free rider problem and republicans in most cases don't like free riders. i don't think anyone should. what it says is, the unions --. >>neil: but democrats don't feel --. >>guest: we don't want free riders. >>neil: if you are a non-union member you benefit from the union contracts. >>guest: yes, the union gets you better wages and you don't have to participate in supporting the union, and the enresult of that is the union loses power and it loses their ability to bargain for better wages for workers. >>neil: what happens now? i have been trying to get a sense if a deal will be made toward the end of the year and benefitten your rules here, they have to have the structure and outline of a deal by friday in order to get things marked up, and out committee and to conference and votes and all of

this stuff i don't understand and the deadline is not the end of the year but this week. >>guest: it can be byzantine process but it can take time to get it converted. your timeframe is right to get it done before christmas but there is a very big chance we are talking about closer to the end of the year if we get an agreement. i think there is better than 50/50 chance we will. there are a lot of hurdles to cross. >>neil: nancy pelosi was criticizing speaker boehner, and speaker boehner and the president for not putting up numbers. they are back to sniping the that is not good. >>guest: there are open lines of communication, and there are conversations going on. >>neil: you mean they just

don't hang up on each other? >>guest: it is better than that. there is a huge difference between talking and coming closer to an agreement. >>neil: were you noon those that said don't touch entitlements? >>guest: i don't know what you are referring to. >>neil: this remain eight democratic congressmen and senators, obviously you were not, i apologize, they said don't touch entitlements. this is not the time to do that. >>guest: the issue with entitlements. medicare, first, the sure is not whether we should. >> chief savings in medicare, the debate is over how we do it. >>neil: you do not think it should be part of this process? >>guest: we can find saving. but not by passing the costs and risks on to the backs of seniors, by looking for better ways to do it. you look at the president's budget which is on the intent he has more savings in medicare over the next 10 years than the ryan republican plan.

>>neil: all i know is a push to raise taxes for the wealthy which may or may not be good but it gets you $80 which keeps the government going for eight days. >>guest: over a one-year period. the idea of additional revenue is a significant part of the bipartisan plan like simpson-bowles that have $4 trillion in deficit reduction and it represents over $1 trillion. quickly, neil, on medicare, the savings the president achieves is not by passing on the cost but reducing over all costs. to. she knows the potential for making or losing money can pop up anytime. that's why she trades with the leader in mobile trading. so she's always ready to take action, no matter how wily... or weird... or wonderfully the market's behaving... which isn't rocket science. it's just common sense. from td ameritrade.

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>>neil: coming to you live from our nation's capitol, neil cavuto here and it looks like they are getting further and further away from a possible deal. it is possible to get one said my last guest by the end of the year but it gets tough when both sides are starting to snipe at each other. there is the issue, too, what kind of a deal do you want in do you want one skewed too much toward raising taxes or ones that democrats fear that is skewed toward entitlements? that is the rub. florida senator rubio telling me he would prefer a deal that does not hike taxes. and the ones they are consider right now are upside down. >> i am not voting for anything that kills jobs.

>>neil: or limiting exemptions. >>guest: we need to simplify our tax code to make it more growth friendly. here is why that is important: if the rates go up because the president refuses to budge he will have to answer for that next year. unfortunately, when people lose their jobs who work at a dental clinic as a billing specialist, or the courier loses their job they are working class folks that could lose their jobs if the president's tax increase goes there, if that happens, president obama will be responsible. by will not hurt growth in america which i know is the only way to solve this problem. >>neil: you do not subscribe that deal or no deal boomerangs and hurts republicans? >>guest: i don't want to go off the fiscal cliff which congress created in a bipartisan way. this fiscal cliff is the direct result of the last fiscal cliff

when we had the debt limit showdown. >>neil: both sides agreed. >>guest: i voted again i. why create the artificial crisis as a way to force action? it never works. >>neil: bethis. they did. >>guest: and now they are going to do it again. they are saying, now, hurt growth in america, cut a deal that hurts growth in america so in a year from now we will have a worst fiscal cliff and that is the real fiscal cliff $16 trillion debt which the tax you have 200,000 less jobsve next year and the people voting for that will be responsible and held accountable for the public policy. >>neil: you have been talking about freeing out to the middle-class. for and reason in the last election republicans lost the middle class. they seemed to get stereotypes as the party that appeals only to the well-to-do.

what i am asking you, how do you change that? the perception sticks in the eyes of some. >>guest: first of all, we need to understand the middle class makes us different and exceptional. every didn't has rich people but what makes us different in history is we have a broad based vibrant middle class. it is not just people in the hill class but millions of people that are trying to get to the middle class. i rely on my occupy life experience. my parents worked in the service industry, immigrants, they did not make a lot of money, a bartender and maid and they owned a house and a car. today all four of their children live a much better life because of them and because of america's pro middle class policies. we have to get back to that. the challenge of the 21st century are different. what stands in the way: the economy is not creating middle class jobs and too many do not have the skills for the 21st century middle class.

>>neil: so, this election was lost over we are indebted to the government. >>guest: romney would have been a great president. my personal perception is that the vast majority of americans want what my parent had, an opportunity to do better for themselves and an opportunity to give themselves whatever they want to be. we have answers, limited government and free enterprise has durable answers and we need to answer that. >>neil: what you are saying, sir, there are so many that get so much from government they are him like embedded loyal voters. some criticize everyone for being callous and different and sore losers but did he have a point? ing i will not comment on his commend because i wasn't there

and i will not criticize him. >>neil: jon huntsman sr. said go away mitt. >>guest: the vast majority of members want a government that creates the conditions for temperature to have a chance to get to the middle class, the growth and educational opportunities, most people, the vast majority of americans would rather have a job that pays more than a welfare check. i believe that. i know that to be true. we have answers for that. we should pursue them. >>neil: looking at the 2016 race, gingrich got headlines when he said the present cop of potential candidate would have a tough time against a possible hillary clinton democratic nominee, that the democrats run the table. what do you maybe 1/2? >>guest: all i can say, four years is a very, very long time, you think back four years ago and how different the world looks, there will be two or three things that happen between now and then and it will change the dynamic.

what i am focused on is making sure for the brad of the number of americans possible, limited government and free enterprise, the principles that is built our country, one that is being sold to and appealed to the broadest number of americans. we have great principles to sell and we need to apply our principles of conservative to the challenges and if we do that the country will be better off, conservatives will be better off and the republican party will be better off. >>neil: the governor if michigan signing off on a law that would, unions say, effectively kill them off much like wisconsin. the governor says this is granting workers in the state, be in a union or not, giving them a right. president obama saying he is against this measure as he was in wisconsin. what do you make of this? >>guest: i have not read the detail only press accounts. i believe people should be allow ed to join a union or not. i come from a right-to-work state and it works for florida.

we have unions in florida and some do a good job of representing workers. my dad was if a union. i worked a picket line if las vegas back in 1983 or 1984. but the point is, i respect unions. they have a role to play in america but i think workers should have the right to decide whether they want to be part of a union and elections on whether to unionize or not should be fair elections and open elections, not rigged elections. if we have that american will remain competitive. >>neil: unions argue this is a trojan horse although he says it is about giving worker as right to choose it is an effort to kill off unions, left to their own device and signing whether they will pay a union fee or not, most in this environment decide not to, it is a back doorway to kill them. >>guest: look, from the union perspective, the law forces you to be a member of the organization and formalses to you pay a fee that is a good deal for you but maybe not for

the worker. i respect the unions. they have an important role to play. they raise valid points on a lot of shes. but i respect the right individual workers to decide whether they want to pay the pee and whether they want to join a union the i am not an expert on union law. i come from a right to work state in florida and we have unions that exist in florida. they do not have as much power in florida but they exist. >>neil: you already know the possibility, or probability that the taxes are going up and that will largely target the well-to-do but there is something else going on next year that will affect, well, everyone. a theme not heard about but no matter where you are in the salary range you are going to get hit. also, joe lieberman on the way out, the man who could be the swing vote for anything and

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>>neil: welcome back, everyone, to the capitol. we don't have any kind of imminent deal at 20 days away from the deadline that could take $1 trillion out of the economy fast with sequestration beganned and tax hikes for everyone guaranteed if any don't come to an agreement. others have argued if they don't have the outline of a deal by friday our goose is cooked. there is something baked in the cake whether you are talking about a cooked goose or not and that is a health care feel our reporter has been looking at and scoffed you don't have to be in the upper income to get hit. >>guest: good evening. like anything that comes from

washington, it is thousands of pages of along and we will find hidden pieces of regulation. we have found it. 190 memberships will be hit with a fee starting in the beginning of 2014, $63 a person paid by employers and medical plans across the country. why $63? to build $25 billion in buffer money for the administration to cover those that have existing preconditions, pre-existing conditions. so this is basically a way for the obama administration to cover the cost of those that come in to the health care exchanges, come in on the new insurance plans. this obviously will be passed on not just to businesses but to those that work for major corporations of the country that are paying for medical insurance. no if's and's or but's it will happen in 2014. >>neil: folks say they have been hiking premiums anyway so

who says they will add this increase on, it will be baked into the increase. you say not necessarily so, it will be an add on, on top of that written? >>guest: it is written in the legislation in the health care legislation, as an additional fee. it is buried if thousands of pages of regulation that many companies, many lawyers across the country, are going through to find out what the health care law will mean whether you are a small business or a big business. at the end of the day it will have to be passed on to the individual. at this point it looks like 190 million americans. the obama administration says this is a temporary fix because there are so many question marks how much this will cost overall with so many new participants. but these years can be five years or citizen years but they say it is only "temporary." we will see. >>neil: thank you.

we have the latest on this process here and i talk about how byzantine it is, our producers say it is not the case, there are logistics to work through and that means the calendar is running against these guys as of this week, this week county then, the role of joe liebermans leaving the united states senate but on his way out he could be the most instrumental member and probably its most influential, as well. [ malennouncer ] it's tt time of year again. time for citi price rewind. because your daughter really wants that pink castle thing. and you realldon't want to pay more than you have to. only citi price rewind automatically searches for the lowest price. and if it findone, you get refunded the difference. just use your citi card and register your purchase online. have a super sparkly day! ok.

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♪ ♪ >> neil: back in washington now, one of my favorite guests of all time. one thing i love about joe lieberman that he just brings integrity to the process, which is why he is leighing. he can't be bothered with this

place anymore. outgoing senator of connecticut. >> thank you. >> neil: good to see you. >> thank you, neil. >> neil: given your reputation and respect that both parties hold for you many argue you will be the guy that helps bridge this gap. do you see that role? do you see anyone bridging this before the end of the year? >> i would love to play that role, but i got to tell you that right now, this is a to top-down hierarchal process. it's president and boehner. so the rest of ru russian us arg on sending messages by coming to your show. >> neil: the message i got is that you are not near a deal. is that accurate? >> guest: that is accurate, but the fact that president obama, speaker boehner met at the white house sunday, they put out the same statement,

they haven't said anything for two days. >> neil: speaker boehner did. he was griping about the president not giving specific on spending. nancy pelosi was saying, you know, boehner is wrong. >> you have to reach to find encouraging news right now. everybody thinks we are going to get together and not let the country go over the fiscal cliff, which, of course, in all common sense and sanity that's what we would do. we have to act. we're on automatic here. you know that. right now i can feel the contrary happening. in both caucuses and the senate, people are beginning to to the inside interest groups so the democrats say don't touch entitlement programs and republicans say i won't support -- >> neil: that's what i'm hearing. driving it further apart. >> yeah, you not going to make it happen that way. there is beginning to be --

there are two conspiracy theories now. one is that the leaders won't mind if the country goes over the cliff because they'll come back under that pressure and negotiate a deal in january. that is high risk, russian roulette. >> neil: your own gut tells you what? >> my gut is not sending me a clear signal now. i felt all along in the final analysis, the congress would not let the country go over the cliff because consequences could be disastrous. we might do it by doing nothing. we might move a goalpost and say now the cliff comes to us in june 30, or september 30. again, that has to happen. majority of both houses and president have to agree. the real tragedy here, to make

you real angry, if you talk privately to both members of -- to members of both houses the only way to do it is accept revenue increases and cut spending. main thing is cut the increase in entitlement spending. none of that is popular. but i think the american people would understand that's what we have got to do. not to be popular but help the country. if we negotiated a debt reduction agreement it would be the best for the economy. >> neil: thank you. >> happy holidays, hearry christmas, happy hanukkah. share "you owe me..." share "just right." the share everything plan. sharable data across 10 devices with unlimited talk and text. get a droid razr m by motorola for $49.99.